Stanislau Bahdankevich: The Treaty on the EEU is one more step heading towards loss of sovereignty

On October 10 a big convention of CIS’ and EEU’s leaders took place in Minsk. What Belarusans are to expect from new integration pretensions?

Belarus was the last to ratify the Eurasian Economic Union Treaty. But for all that Belarusan authorities got Moscow’s consent to keep revenues from export duties on petroleum products in 2015, and in a day two chambers of the Belarusan Parliament ratified the Treaty on the EEU, only leaving Lukashenka to sign the document.

What benefits does the participation in the Eurasian Economic Union bring to Belarus? Did Lukashenka board the ship that is already sinking?

“EuroBelarus” Information Service talked about it with Stanislau Bahdankevich, former head of the National Bank.

- Belarus was the last to ratify the Treaty on the EEU, even though it was made in a day. Why did we delay it for so long so long?

- We were bargaining. We immediately ratified the Treaty after Russia paid us. If we talk about keeping revenues from export duties on petroleum products a sum of $1.5 billion dollars was at stake; this is quite a thing to bargain about. If we yield our sovereignty, then at least we do it for money, not to please Russia.

- Minsk ratified the Treaty with one condition: the agreements “have to provide for the regulations about the inadmissibility of their deterioration in the future up to the complete withdrawal of defects and limitations”. What for was stipulation mentioned?

- I think that such statements are made for the public. For Belarus, prices on energy will be growing gradually, as in the future flow of capital, goods, and labor force within the Eurasian Economic Union is to take place on equal terms. Thus, Belarus has to be ready for the fact that its situation is to deteriorate.

Now the state of Russian economy is deteriorating, which has its negative influence on Belarus as well. Russian ruble is devaluing, inflation is breaking the earlier predicted limits, capital outflow exceeded $100 billion dollars, state companies and large monopolies have problems with paying off the loans they got at the world market.

- Does Minsk leave itself a loophole to get away from the EEU in case the situation is deteriorated?

- It doesn’t. Who could give it more money that Russia? Even in crisis, Russia still holds a vast amount of oil and gas. In case the situation at the world market is aggravated, Putin will have to demonstrate that the Eurasian Economic Union started to work. Lukashenka used that to pressurize Russia. But what excuse will Lukashenka find in future?

All economic factors demonstrate that Belarus is a poorly developed country. If in Poland and Lithuania state property makes 25%, in Belarus this indicator equals 70%. Poland has similar figures after the dissolution of the Soviet Union. Gross revenue per capita is now by 35% bigger than that in Belarus.

What can I say if Ukraine that is at war now and “flourishing Belarus” occupy equal positions by level of inflation!

Perhaps, the aggravation of the situation might make Lukashenka introduce reforms more vigorously. All the more that Miasnikovich has already stated that Belarus is not against getting yet another IMF stand-by. However, IMF can only give a loan for some concrete reforms, which are to be made under its control.

- In result of blackmailing Minsk got Moscow’s consent to keep revenues from export duties on petroleum products in 2015. What real benefits will this agreement bring? The economists name different numbers – from $1.5 to $3.5 billion dollars.

- We were paying about $1.5 billion dollars to the Russia’s budget, and we are about to get the same. On the other hand, the economists assess the overall situation and count donations in the form of low prices on oil and gas. And if the taxes and prices on crude oil inside Russia will grow, the same thing happens with Belarus. And our country is to experience the consequences of this policy as early as in 2015.

- How politically and economically profitable is the EEU for Belarus?

- From the political perspective the EEU Treaty is beneficial for Lukashenka’s regime, as it will be under Russia’s protection.

From the national interests’ perspective – this is one more step heading towards loss of sovereignty. The Treaty doesn’t foresee for the mechanism to leave the EEU (these mechanisms are very controversial – EuroBelarus), which means that we are its eternal members.

Russia has trade capital related to the raw stock, but it has no innovational capital or technologies; these things are situated in the West. So Belarus should better keep its sovereignty and its strategic friendship with Russia, as well as conclude a treaty on free trade with Russia, the EU, and the US. This would be an ideal way for Belarus.